Michigan

The Herman Kittle Properties (HKP) is proposing a $12 million, 76 unit multi-family brick-facade apartment building on approximately 3.14 acres located southeast of the proposed River and South streets intersection of Water Street.
(Courtesy City of Ypsilanti)

Some Ypsilanti officials believe a $12 million proposal to build a 76-unit affordable housing building on the vacant Water Street property could be a good thing for the city.

"I'm very interested in it and want to get more information," said Mayor Paul Schreiber. "This will be the first public unveiling. Ypsilanti has a lower (median) income than the rest of county, so in some ways it is market rate housing. It's also building along the river in a nice spot. I'm cautiously interested in it. It's certainly something that I think is a great use of the land. I think it really has some possibilities."

Indiana-based developer Herman & Kittle Properties, HKP, is proposing the multi-family brick-facade apartment building that would be located southeast of the proposed River and South streets intersection of the Water Street Redevelopment Area.

The development would be called the Water Street Flats.

HKP is requesting approval for a six-month letter of intent to proceed with due diligence and potential purchase of the 3.14 acres with a goal to begin construction by October 2014.

City documents show the total project investment is estimated at $12.1 million, with $1.7 million going toward infrastructure and site preparation costs.

According to city records, the purchase price would be $50,000 per acre, or $157,000.

The purchase price is less than the $210,000 that Family Dollar has agreed to pay the city to construct an 8,320-square-foot store on the Water Street site.

According to the city, HKP's purchase price takes into account the developer's "large up-front investment in infrastructure for the site."

Schreiber said he does have some concerns about the proposal. He said he's interested in learning more about the demographics the developer hopes to attract.

"What kind of people would we be attracting?" Schreiber asked. "How does that help our downtown? If the answers are positive, I think that would be a good project. Water Street is an extension of downtown and we want to make sure what we do on Water Street is an extension of downtown. We want to make sure it has diversity, too."

Council Member Pete Murdock said he plans to support the letter of intent Tuesday because it's non-binding for both parties, but gives city staff the go ahead to do more investigations into the proposal.

"There's some elements I think that are good for the project as a whole, dealing with a problematic piece of land that wouldn't be developed otherwise," Murdock said. "The infrastuructre they’re proposing to build, I think it's all pluses. We need to do our due diligence."

The proposal comes 14 years after the city began assembling the property in 1999. The city still owes around $24 million on the Water Street debt, a decrease from 2006 when the city owed close to $30 million. The principal amount owed on the property was $15.7 million, but due to interest, the costs ballooned.

In 2014, the city will have to pay $1,340,727.50.

The original Water Street vision never happened, but Murdock said in a general sense, this project fits.

"It’s a little bit like the argument on Family Dollar," Murdock said. "The visions call for stand alone retail and that’s what it is. People might not like the name of it. It's housing, they might not like the type of housing or whatever they think it is, but I think in that sense it fits the visions and the plans."

Murdock said he could potentially change his mind based on what information might come out of the Tuesday meeting.

"If things don’t seem to be looking like we want to do it, we don’t have to do it," Murdock said. "We’re not totally committing."

Council Member Ricky Jefferson said he believes the proposal is a great idea.

"I believe that for it being the first housing going there, that it's going to be a cry in the community about it being affordable housing," he said. "But I believe it's exactly what should go there. There are parcels that are left to be purchased that can be used for other things.

Just like the others, Jefferson said he has a few questions.

"We still have to look at it," Jefferson said, adding that a few council members plan to visit other sites owned by HKP. "I also think that the location is good. Its sitting near the water and most of the housing should be placed near the water, not too close, because hopefully, we want to get something along the border for public participation."

The rents will be calculated at 60 percent of the area median income. In its letter of intent, the developer stated that the planned amenities for the Water Street Flats will exceed those found in other market rate units in the area.

Schreiber said the city's housing stock is comprised of nearly 2/3 renters and he doesn't see that changing any time soon partially because of Eastern Michigan University and its student population.

Schreiber said this housing could potentially attract millenials and young professionals.

"If we could have young, artistic people that might not have a high income, but can afford living in Water Street Flats, that would be a positive."

Jefferson said he's concerned the rent prices might be a little higher than what he would have liked to see for affordable housing.

"The pricing of the housing, of the apartments, are kind of out of the range that I hoped it would be," he said. That’s because the median is based on Washtenaw County and not the city's."

Schreiber said he's not ready to disregard or throw his full support behind the project until he learns more about the proposal.

"This is a big deal and I think I would like to have my questions answered and I would like to hear other council members questions," he said. "What we don’t want to have happen is for a developer to sink a lot of money into forming a plan and having it denied. The best example of that is Burger King. I think we’re learning from that and I think council is communicating better about what it wants."

Schreiber said he believes the proposal, which shows interest in the property, is a sign of things looking up for Ypsilanti.

"The fact we have the Eastside Recreation Center and Family Dollar, which are very different projects, can be very positive for downtown. I think things are starting to look up for Water Street and the city."

Katrease Stafford covers Ypsilanti for The Ann Arbor News. Reach her at KatreaseStafford@mlive.com or 734-623-2548 and follow her on Twitter.